U.s. Jobless Rate Drops

State`s Up

May 09, 1987|By Michael Arndt.

The nation`s unemployment rate fell in April to 6.3 percent, its lowest level in eight years, but the number of unemployed in Illinois surged to 8.2 percent of the labor force, the U.S. Department of Labor said Friday.

Economists hailed the unexpected national job gain as a sign that the economy, already in its longest period of growth since World War II, will continue to expand moderately through the second quarter.

Illinois` unemployment rate, up from March`s 7.7 percent, was the state`s highest since May, 1986, and the third-worst in April among major industrial states, trailing only Michigan and Texas.

Joblessness in the state rose because farming and other seasonal industries, such as construction, did not create enough positions to accommodate the 32,000 people who entered the labor force last month, state officials said.

The drop in unemployment nationally from 6.6 percent in March was attributed to the addition of almost a half-million jobs and a smaller number of out-of-work people looking for work, the Labor Department said.

At the White House, President Reagan, meeting with members of Congress, said, ``These figures exceed the expecations of most private forecasters and, taken together with the healthy gains in unemployment during the first quarter of this year, indicate that economic expansion and creation of jobs continues at a strong pace.``

Civilian unemployment last month was the lowest in the Reagan presidency. April`s 6.3 percent rate matches the rate for the first three months of 1980. Not since December, 1979, when unemployment was 6.0, has the rate been lower. The Labor Department said 467,000 more Americans had jobs in April than in March, with civilian employment at arecord 111.8 million. The number of jobless in April was 7.5 million, down 354,000 from March.

The service sector, accounting for three-fourths of the nation`s business and government employment, created most of April`s jobs, hiring 275,000 people, or more than half last month`s new employees, the government said.

Retailers accounted for 65,000 of those service jobs, while businesses and health services added 50,000.

Farming accounted for another third of the job gain.

Construction employment also jumped, by 25,000 jobs. Economists said much of the hiring took place after Congress overrode Reagan`s veto of an $88 billion highway construction bill.

But economists pointed out that manufacturing employment also was up slightly across the nation, despite big layoffs by General Motors Corp.

Employers ``are staffing up to meet production needs,`` said David Wyss, senior economist at Data Resources Inc., Lexington, Mass.

``What`s happening is that U.S. producers are becoming more competitive,`` Wyss said. ``That`s showing up in producers` willingness to hire people.``

The jobless rate has been falling steadily since September, when it stood at 7.0 percent. Since then, employers have added a net 1.8 million workers to the nation`s payrolls.

In Illinois, however, the number of employed last month remained at 5.18 million, the same as in March. The unemployment rate jumped because 32,000 more people were looking for work, raising the number of out-of-work job-seekers to 466,000.

That meant that 8.2 percent of Illinois` 5.65 million-member labor force was unemployed, the highest percentage since last May`s 8.5 and up from a recent low of 7.4 percent recorded in November, December and January.

Sally Ward, director of the Illinois Department of Employment Security, said this year`s warm spring lured more people into the market earlier than usual.

``And collectively, the construction, recreation, amusement and agricultural industries did not create enough seasonal jobs to accommodate all those job-seekers,`` she said.

Another factor, she said, was the layoff of 3,600 workers from Chrysler Corp.`s Belvidere, Ill., plant and the domino effect those layoffs had on suppliers.

Of the 11 largest states, only Texas and Michigan, where the unemployment rate was 8.6 percent last month, had greater percentages of their work forces out of work.

The rate in New Jersey dropped to 3.7 percent, while in Massachusetts it rose to 4 percent.

The rate for whites went down to 5.4 percent from 5.6 percent, while black unemployment fell to 13 percent from 13.9 percent. The Hispanic jobless rate increased to 9.2 percent from 9 percent.

The rates for all adults fell to 5.5 percent from 5.8 percent. Unemployment among teenagers dropped to 17.4 percent from 18.1 percent. The rate for black teenagers declined to 36.5 percent from 38.8 percent.

In February, the last month for which the information is known, Louisiana had the nation`s highest unemployment rate, at 14.3 percent, while New Hampshire`s 2.7 percent was the lowest.